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Google Dominance Grows with Mobile Search

It wasn’t that long ago that predicting Google would struggle in the age of mobile was all the rage.

These predictions usually included the prophesy that apps would overtake browsers as the preferred method of viewing content on smartphones, and search would move to niche engines that specialize in specific areas of content. Google would be left on the outside looking in, and the giant would slowly lose its grip on digital marketing dollars.

Looking at the landscape of today, however, it’s clear that Google is doing quite well for itself with the growth of mobile device usage. If anything, it seems, we should have all been worried about the fate of Bing and Yahoo in the age of mobile.

Google Search Spend Growing Impressively

According to our latest Q1 Digital Marketing Report, which includes data and in-depth analyses across paid search, SEO, social media, display advertising and more, we found that Google paid search spend increased 25% Y/Y in Q1. Google later officially reported 23% revenue growth in constant currency terms.

As you can see from the chart, this represents Merkle's biggest Y/Y spend increase on Google since Q3 of 2014.

At the same time, aggregate CPC declined 6% - a result of mobile paid search traffic, which carries much lower CPC than desktop for most advertisers, growing significantly in share over the past year.

While some of this growth is a result of increased mobile device usage, much of it is tied to changes Google made over the past few quarters, including:

  • The addition of a third text ad above the organic results on phones where there used to be only two
  • The increased size of the PLA format on phones in early September

 

  • The rise of search partner traffic on phones, particularly for PLAs

  • The apparent rise in the frequency with which Google shows PLAs on phones beginning in July 2015 and continuing through March

All of these changes contributed to Google’s growing mobile traffic and spend, which is in turn driving much of Google’s impressive overall spend growth.

Looking at overall spend share attributed to Google, the result is obvious – Google is winning the fight for search advertising dollars by more than it was last year:

Bing and Yahoo Struggle to Generate Growth

As Google took spend share, Bing and Yahoo are naturally losing share, and the big differentiator seems to be mobile.

While Bing and Yahoo together accounted for 14% of all paid search clicks in Q1, they combined for just under 5% of phone clicks.

Read another way, Google accounted for 95% of all phone paid search clicks. 95%!

And while Google’s efforts to monetize mobile search have certainly hurt organic visits, Google actually gained share of mobile organic visits Y/Y in Q1, indicating that it’s a query volume problem as much as it is a monetization issue for Bing and Yahoo.

This is backed up by data from StatCounter, which shows Google’s share of search engine usage up nearly six percentage points in March Y/Y.

In order to gain paid search spend share back, Bing and Yahoo have to find a way of getting their results in front of mobile users more often.

Yahoo, for its part, feels it can create ‘a richer, more action-oriented set of experiences’ in mobile search by incorporating ‘rich card experiences.’

However, even carving back share by enticing users with a superior search experience will be an uphill battle considering the current landscape of mobile device usage.

Google is the Default Search Engine for Most Smartphones

Take a look at how Q1 organic traffic breaks down by OS:

Android and iOS devices combined to account for 43% of all organic search visits. All mobile devices combined accounted for 44% of organic search visits.

The browsers on both Android and iOS devices use Google as the default search engine, meaning users have to consciously change the default search engine in their browsers or actively go to the Bing or Yahoo websites in order to search through these engines.

This presents Google with a massive advantage in getting mobile users to search through its engine, and it’s unclear if Bing or Yahoo really have any clear path towards battling back without paying iOS to become the default search engine on iPads and iPhones (which some have estimated cost Google $1 billion in 2014, likely more now).

Advertisers Must Focus Resources Where Their Search Dollars Are Going

Google is currently widening the gap between itself and competitors in terms of search traffic and ad spend. Mobile is a huge driver of that success, both because Google has updated its SERP in several ways that produced more ad revenue and because Google is well positioned as the default search engine for most mobile devices.

Bing and Yahoo are on the other side of that coin, with trouble both generating mobile searches as well as monetizing the traffic.

If current trends continue, it won’t be long before Google accounts for more than 90% of all search spend. That means it’s going to continue to get harder for advertisers to justify devoting resources to optimizations specific to Bing and Yahoo, especially now that non-Google spend is split between Bing Ads and Yahoo’s Gemini platform.

I’m sure there will be a few who read this and shake a fist at their screen as they shout that Bing and Yahoo far outperform Google in this or that metric and that it’s incredibly important to manage this traffic carefully, but the sad reality is that clicks from those engines just aren’t growing for most brands. Google is where the growth is.

Casting anti-trust philosophical and legal issues aside, a one search engine world is actually a lot simpler for advertisers. If all users are turning to the same place for searches, advertisers can focus all of their attention and time on a single platform, and only have to update systems and processes for updates from one entity.

Maybe Bing and/or Yahoo can right the ship and regain some of the spend share they’ve been bleeding, but for now paid search marketers are forced to slowly but surely apply a greater share of their attention to Google.

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